Radisson Hotel sold for $5.5 million at auction

NASHUA – A New York hotelier bought the landmark Radisson Hotel with a $5.5 million bid at a foreclosure auction Wednesday.

After outbidding an unidentified man in tense back-and-forth bidding, Attilio Petrocelli smiled and declared he would renew the castle-styled hotel’s lost days of glory.

“We’re gonna make everyone proud of this hotel,” Petrocelli said.

Petrocelli is CEO of United Capital, a Great Neck, N.Y., company that deals in real estate and operates four hotels on the East Coast.

He said his company will spend as much as another $6 million to renovate the Radisson’s 336 guest rooms, convention rooms and restaurant.

United Capital intends to keep the hotel as a Radisson franchise and has no definitive date for when it will open the hotel under its own stamp, Petrocelli said.

The hotel remains open for business today. The mortgage holder for the previous owner has had a skeleton work force catering to guests and convention clients in the spacious seven-story hotel. Petrocelli said one of his first tasks is hiring a full staff.

The previous owner, Southern New Hampshire Hospitality Management of Portsmouth, temporarily shuttered the hotel in February, chasing guest and employees out into the parking lot while claiming the building had a plumbing leak. But it soon surfaced that the company had financial woes, which led to the foreclosure auction.

A lot of renovation work is needed, at least $6 million worth, Petrocelli said. The roof and walls need sealing, and the rooms need an overhaul.

The Flatley Co. opened the hotel in 1979, and operated it as the Sheraton Tara until Southern New Hampshire Hospitality Management bought it in 2007 and franchised the business under the Radisson umbrella.

It stand as one of Nashua’s defining landmarks with its castle design and size – all visible from F.E. Everett Turnpike. Its closeness to the highway had long made the hotel a destination spot, a fact not lost on Petrocelli.

Sometimes, the winners of auctions get tight-lipped when approached by reporters. But not Petrocelli. He shared his plans for restoring the Radisson as a prominent business.

“We think this should be the place to have a social function in Nashua,” Petrocelli said. “If you get married, we want you to get married here. If you have a prom, we want the prom here. We want every social function to be here.”

Petrocelli was one of two people to place bids on the hotel. His competitor did not identify himself and left the Radisson immediately after the auction, which was held in a function room off what used to be the hotel’s main restaurant.

As soon as auctioneer James St. Jean declared United Capital was the top bidder, Petrocelli walked back several rows of chairs and shook the hand of the unidentified man. Petrocelli joked to the man that he had made the acquisition more expensive than necessary.

But during the five-minute flurry of bids that St. Jean later called “interesting,” money appeared to be no obstacle for Petrocelli or the mystery man at the back of the room.

St. Jean started the action by asking for $10 million. There were no takers. Then $5 million. No hands.

When St. Jean dropped to $1 million, the unknown man raised his hand. St. Jean then asked for $2 million and Petrocelli responded.

Petrocelli and the other man exchanged bids until it reached $5.5 million. Petrocelli met that asking price.

St. Jean then wanted to know if the other bidder wanted to buy the hotel for $5.6 million. The man didn’t respond.

With that, United Capital had just bought another hotel, a property Petrocelli and his staff have been eyeing for months, he said. The company operates a Radisson in Utica, N.Y., Doubletree at Hilton hotels in Miami and Windsor Locks, Conn., and a Wellesley Inn hotel in Atlanta.

The Radisson in Nashua has an assessed value of $16.1 million, and produced a recent tax bill of $338,231, according to St. Jean.

Aside from the restaurant, it has several large function ballrooms and smaller conference rooms, and an attached gym owned by Atlantis Sports Club. Ducks and geese have long made the hotel’s pond a stopping point in their travels. The building is 241,146 square feet, and it sits on 16.8 acres.

To bid, a $200,000 cash or check deposit was required. An additional deposit of 10 percent of the $5.5 million sale price – $550,000 – will be due within 10 days. The balance of the purchase price is due within 45 days.

The auction had no effect on a legal dispute between the owner of Southern New Hampshire Hospitality Management, Anthony DiLorenzo, and the mortgage holder, AFP 105 Corp.

After DiLorenzo’s company temporarily closed the hotel, a federal judge allowed Crescent Hotels & Resorts LLC to temporarily run the business while AFP 105 and SNHHM tangled in court for most of this year.

Sherilyn Young, from the Concord law firm Rath, Young and Pignatelli, which represents AFP 105, said Wednesday that a settlement had been reached between AFP 105 and SNHHM but paperwork has not yet been finalized.

“My clients are thrilled,” Young said of Petrocelli’s purchase. “It’s a beautiful piece of property. They’re very excited to see it restored it to its former grandeur.”

On Nov. 1, Crescent ended its receivership, and AFP 105 assumed operating the hotel, according to a court filing. Crescent told the court it had streamlined operations and made improvements to the hotel, including introducing building-wide Wi-Fi access and making lighting upgrades.

AFP 105 had claimed in court that no mortgage payments had been made this year, and it had to make a $164,518 real estate tax payment. Southern New Hampshire Hospitality had no way to pay for millions in needed upgrades and was in danger of losing its Radisson franchise because it couldn’t pay $4 million in franchise payments, according to a motion filed by AFP 105.

The hotel lost between $14,000 and $158,000 a month between January and July, according to court-ordered financial reports cited in AFP 105’s motion.

In its objection to AFP 105’s motion, Southern New Hampshire Hospitality argued improper actions by the original lender, CW Capital, created the financial difficulties.

The mortgage required that $2.3 million in capital improvements be added to the building, but CW Capital rejected all but about $500,000 of those upgrades. The lender demanded more than $1.8 million in payments, which DiLorenzo refused, then started taking loan payments and applying them to a separate account, according to the motion.

That action created a loss of at least $1.4 million for the hotel and created a “snowball effect” of cash shortages and missed payments, according to Southern New Hampshire Hospitality’s motion.

For Petrocelli, it’s a new era, and time to restore the hotel’s name. Fittingly, after the auction, a representative from Flatley introduced himself to Petrocelli and started chatting about the building.

Albert McKeon can be reached at 594-6528 or amckeon@nashuatelegraph.com. Also check out McKeon (@Telegraph_AMcK) on Twitter.